FBI agent, girlfriend held on espionage charges

Dan Eggen, Kimberly Edds, Washington Post

Published 4:00 am, Thursday, April 10, 2003

2003-04-10 04:00:00 PDT Los Angeles -- A top FBI counterintelligence agent gave a suspected Chinese spy access to voluminous amounts of classified information during an alleged 20- year affair between the two, according to documents unsealed Wednesday in U.S. District Court.

James "J.J." Smith, 59, and Katrina Leung were arrested Wednesday and charged with espionage-related offenses as the latest spy scandal to rock the FBI emerged in public after a long investigation.

Federal prosecutors alleged that Leung, 49, a prominent venture capitalist and contributor to the Republican Party, acted as a "double agent" during a 20- year sexual affair with Smith, a senior FBI counterintelligence agent who was acting as Leung's "handler." The two were arrested in connection with the alleged theft and transfer of a classified national defense document to the communist Chinese government.

According to an FBI affidavit, "Smith routinely debriefed Leung at her residence and on occasion took classified documents there and left them unattended. Leung surreptitiously photocopied some of them, and documents she obtained in this manner have been recovered from her residence."

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Investigators also allege that Leung simultaneously had a long-running affair with another FBI counterintelligence official in San Francisco. The second agent, who is not named, allegedly warned Smith of Leung's duplicity in 1991, but Smith did not end his alleged relationship with Leung or report her to his superiors, officials said in court documents.

Leung was charged with obtaining classified documents with the purpose of aiding a foreign power, while Smith was charged with gross negligence for letting her obtain them. Both charges carry a maximum penalty of 10 years in prison.

Attorneys for both defendants denied the accusations, describing them as loyal Americans.

The case comes on the heels of the spy scandal involving Robert Hanssen, the former senior FBI counterintelligence agent who was convicted of providing U.S. secrets to the former Soviet Union and Russia and is serving a life sentence.

FBI Director Robert Mueller, who learned of the allegations against Smith in early 2002, said the investigation was reviewed by a special counsel and run by a special counterintelligence task force.

"It is a sad day for the FBI," Mueller said in a statement.

Smith acted as the handler for Johnny Chung, the Chinese American businessman who was central to the Democratic fund-raising scandal that enveloped the Clinton administration in the late 1990s. Chung hired the same defense attorney now representing Smith, officials said.

Leung and her husband contributed $27,000 to the GOP in the past decade, according to campaign finance documents. Leung was also well-known in Los Angeles political circles for her close ties to the leadership of the People's Republic of China.

The document at the heart of the case is a copy of a June 12, 1997 FBI memorandum found in Leung's home concerning Chinese fugitives that also "discussed reporting of national defense information by a confidential FBI source," the Justice Department said.

Investigators also seized other sensitive materials from her home, including a transcript of telephone conversations between Leung, whose Chinese government code name was "Luo," and a Chinese official, whose name was "Mao," court documents said.

Leung admitted to copying documents from Smith's briefcase during interviews with the FBI, but Smith said he did not know she was doing so, investigators said.